Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.
Coinbase Global (NASDAQ:COIN) is a leading cryptocurrency platform. It started in 2012 to provide anyone, anywhere with the ability to easily and securely send and receive Bitcoin (CRYPTO:BTC). Today, it allows anyone to invest, spend, save, earn, and use a variety of cryptocurrencies.
The company has developed several products and services to encourage more people to use cryptocurrencies. Its digital wallet, Coinbase Wallet, lets users store and manage all their crypto, non-fungible tokens (NFTs), and other wallets in one place. Meanwhile, its trading platform allows users to buy, sell, or HODL (hold for the long term) cryptocurrency. The company's smart contracts allow users to trade their crypto for fiat currency like the U.S. dollar (through USD Coin (CRYPTO:USDC), a stablecoin redeemable for U.S. dollars on a 1:1 basis).
Coinbase has a bold goal. It aims to build trusted, easy-to-use products and services to bring more than 1 billion people into crypto. The company wants to develop more uses for crypto beyond trading, so more people will use it for more things, expanding its ecosystem.
The potential of crypto might have you interested in investing in Coinbase, especially since it became a member of the S&P 500 index in 2025. You might already be a user of its platform. Here's a step-by-step guide on how to buy the crypto stock and some factors to consider before adding the up-and-coming company to your portfolio.
Investors interested in buying Coinbase stock have to take a few steps before becoming a shareholder. Here's a step-by-step guide to adding the cryptocurrency platform to your portfolio.
It's essential to thoroughly research a company before buying shares. You might uncover something about the company that changes your mind. On the other hand, the research process might firm up your conviction that the stock has the potential to be a high-return investment.
There are a lot of factors you should consider when researching a stock. Here are a few reasons why you might want to purchase Coinbase shares:
On the other hand, here are some factors that might lead you to opt against buying shares:
Digging into a company's profitability is an important aspect of an investor's research process because increasing profitability is typically the biggest factor driving a company's stock price over the long term. With that in mind, here's a closer look at Coinbase's profitability.
The cryptocurrency exchange has been solidly profitable over the past year. It posted $66 million of net income in the first quarter of 2025 on almost $2 billion of total revenue. However, while Coinbase is profitable, its net income fluctuates wildly. It generated almost $1.3 billion of net income in the fourth quarter of 2024 and almost $1.2 billion in the first quarter of 2024. Meanwhile, its earnings in the second and third quarters of last year were $36 million and $75 million, respectively.
Market volatility can have a big impact on Coinbase's profitability. That can affect its transaction revenue, which declined 19% in the first quarter of 2025 to $1.3 billion. The company is working to offset the variability of its transaction revenue by growing its subscription and services revenue (a 9% rise to almost $700 million).
Coinbase had not started making dividend payments to its shareholders as of mid-2025. The cryptocurrency exchange doesn't intend to begin paying dividends in the foreseeable future. It's retaining earnings to fund its operations and continued expansion. It also launched a $1 billion share repurchase program in late 2024.
Investors don't have to directly invest in Coinbase stock to gain exposure to the cryptocurrency platform in their portfolio. An alternative strategy is to passively invest through a fund that holds its stock. One of the most common passive investment vehicles is an exchange-traded fund (ETF).
According to ETF.com, 182 ETFs held 27.6 million shares of Coinbase as of mid-2025. One of the biggest holders was Cathie Wood's Ark Innovation ETF (NYSEMKT:ARKK). The ETF had a more than 9% weighting to the stock, which was its second-largest holding. That makes it a solid way to gain exposure to Coinbase and other leading growth stocks.
The First Trust SkyBridge Crypto Industry and Digital Economy ETF (NYSEMKT:CRPT) had an even higher allocation to Coinbase at 18.3% (its second-largest holding). That high allocation makes this ETF an option to consider for those seeking meaningful exposure to Coinbase and other players in the crypto sector through a passive ETF investment.
Coinbase didn't have an upcoming stock split as of mid-2025. The cryptocurrency exchange had not completed a stock split since its direct listing on the Nasdaq Exchange in 2021. It likely won't split its stock soon. Shares of Coinbase had only gained about 5% from their direct listing price by mid-2025. While shares traded at more than $260 a piece at the time, the crypto platform would need to rise well above its initial list price before splitting its stock.
Coinbase is a leading cryptocurrency platform. That puts it in an excellent position to capitalize on the growth it sees ahead as more people use crypto for more things. Increasing crypto usage would help grow the company's revenue, potentially enabling it to finally turn the corner on profitability and helping drive significant stock price gains in the future.
However, it could continue to be a bumpy road for Coinbase. Cryptocurrencies have proven to be very volatile, which has affected its revenue. Investors need to ensure they understand the risks before investing in Coinbase stock.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Motley Fool Returns
Market-beating stocks from our flagship service.
Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 2025-08-29 01:10:40.672501.
Discounted offers are only available to new members. Stock Advisor list price is $199 per year.
Calculated by Time-Weighted Return since 2002. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.
